Dr Reddy's Labs gains for second straight day on Covid vaccine deal

Shares of Dr Reddy's Laboratories extended their gains to the second straight day, up as much as 2.4 per cent to Rs 4,748 on the BSE on Thursday. The stock had risen 4.4 per cent in the last trading session after the firm and Russia's sovereign wealth fund, Russian Direct Investment Fund (RDIF), agreed to cooperate on clinical trials and distribution of Sputnik V vaccine in India.

Upon regulatory approval in India, RDIF shall supply to Dr. Reddy's 100 million doses of the vaccine, Dr Reddys said in a release on Wednesday. The Sputnik V vaccine, which is based on well-studied human adenoviral vector platform with proven safety, is undergoing clinical trials for the coronavirus pandemic, it said.

Deliveries could potentially begin in late 2020, subject to completion of successful trials and registration of the vaccine by regulatory authorities in India, the release said.

On August 11, the Sputnik V vaccine developed by the Gamaleya National Research Institute of Epidemiology and Microbiology was registered by the Ministry of Health of Russia and became the worlds first registered vaccine against COVID-19 based on the human adenoviral vectors platform, the release said.

Showing no signs of a relief, India recorded 97,894 Covid-19 cases in just 24 hours, taking its tally past the 5.1-million mark. With this, India is rapidly nearing the US tally of 6.8 million. The death toll has risen by 1,139 to 83,230.

Meanwhile, Dr Reddy's today announced the launch of over-the-counter (OTC) Olopatadine Hydrochloride Ophthalmic Solution USP, 0.2 per cent and 0.1 per cent, the storebrand equivalents of Pataday Once Daily Relief and Pataday Twice Daily Relief, in the U.S. market.

Olopatadine Hydrochloride Ophthalmic Solution USP are indicated for the temporary relief of itchy eyes due to pollen, ragweed, grass, animal hair and dander. The Olopatadine Hydrochloride Ophthalmic Solution USP, 0.1% is also indicated for the temporary relief of red eyes, it said.

At 10:25 AM, Dr Reddy's Laboratories' stock was trading 2.09 per cent higher at 4,728 as against 0.3 per cent decline in the benchmark S&P BSE Sensex. Around 2.1 lakh shares have chnaged hands on teh NSE and BSE so far.

Analysts at HDFC Securities had recently upgraded the stock from 'REDUCE' to 'ADD' while hiking the target price to Rs 4,670.

In a September 15 note, the brokerage said,"The growth visibility of the US business has improved with the strong momentum of new launches (12 launches in YTD FY21) including niche ones such as gCiprodex (first to market). The dependence of gCopaxone and gNuvaring on FY22 earnings reduces with the new product flow and favourable ruling of gVascepa (now in our estimates). Structural tailwinds in the API business (15% of revenues) will lead to double digit growth over the next few years." 

"We increase our EPS forecast by 7-8 per cent for FY21/22 to factor gVascepa launch and our target multiple to 22x (from 20x earlier) to factor improved visibility in the US and API business," it said.